Does this article's explanation make sense?

I'm interested in knowing if the economic explanation of this article makes sense http://www.counterpunch.org/2017/02/02/how-we-the-people-were-screwed-by-obamas-bogus-recovery/ Thanks you.

Official response from Richard Wolffsubmitted

The article's argument that Obama's "recovery" was largely a matter of hyping a poor, slow, limping economy after 2008 is mostly correct. The logic of the article overemphasizes the problem of inflation. Simply put, an inflation can, under certain circumstances, work as well to deepen inequality as the absence of inflation. The willingness of the rest of the world's rich to lend to the US government played an important role here too, as did other factors. The fuller story of how and why the US and world economies have taken so long to recover so little is more complex than the article admits, but the critique of Obama and "recovery" is good.

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After reading that article, The article seems to be grasping at a huge number of straws, and makes many assumptions about things such as inflation which aren’t explained in further depth. at some level, it states economic figures, but it is completely unexplained how this supports their thesis. Then the article immediately jumps to the idea that trump will save everything and increase growth to 4% by spending “1 trillion dollars”. The article conveniently ignores how trump wants to create private-public partnerships, in which private corporations build the infrastructure ‘for’ the government, then the government becomes indebted to these private corporations, who may very well put polls all over the roads, or even raise the cost to use much infrastructure so that the debt can be paid off by the general public. In a sense this private-public partnership ends up being a cost that the general public has to pay for, not the wealthy. An indirect tax so to speak. also, the article ignores how trump will even get 1 trillion dollars in the first place, especially while trump wants to decrease taxes on the wealthy and the corporations, and double spending on the military. So its completely unexplained how trump could possibly afford the infrastructure.

Daryl MacFarlane commented
2017-02-04 07:51:32 -0500

i actually would like to comment on obama’s stimulus package before i review the article. Obama created a 900+ billion stimulus package to bail out big banks who got themselves in huge debt in the first place, in hopes that they can recover, so that they can start to send out huge loans to corporations again. This is in short, a way of indirectly giving an enormous handout to corporations as a means of recovery which hoped that the corporations would start to hire more and to start decreasing the real-unemployment rate which immediately shot up above 17% almost instantly.

There are Two options that could have been considered to deal with the huge unemployment, and the failed banking institutions are completely unnecessary for this plan which basically all politicians know about, but never talk about. For one, Obama could have used that same stimulus package as a tax on the rich and failed corporations, and use that money to create a federal works project, which hires all the unemployed people, whether they are skilled or not, to participate in federal works to build useful things, and be paid for it. This But there is an even better solution beyond this. you could tell the unemployed people “hey these capitalist institutions have failed, if you want to turn the failed corporation you work for into a worker cooperative, we will give you this money to buy it out at a very cheap cost, and we will sign into law forcing bankrupt corporations to have to first ask their workers if they want to buy it out”. Such a plan to turn bankrupt corporations into worker cooperatives is a direct response to the failed corporations telling them “your utterly useless, you can go away”, and being extremely beneficial to the people who became unemployed during the crisis, and allow them to get their jobs back that they had experience in very rapidly.

The current real unemployment rate of 9.4% (on the rise currently) indicates that the US still has not fully recovered from the crisis, because the pre-crisis real unemployment rating was 8.4%.

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Richard D. Wolff is Professor of Economics Emeritus at UMass Amherst and a visiting Professor in the Graduate Program in International Affairs of the New School University in New York. Richard Wolff is also a co-founder and active contributor of his non-profit: Democracy at Work